The White House will reverse course and approve the Keystone XL pipeline, according to Moody’s Investors Service.

“But approval will not be quick. A prolonged permitting process risks missing the very oil price boom that inspired Keystone XL in the first place,” Stuart Miller, Moody’s vice president, said in a report published November 12.

“Still, even if Keystone XL went into operation in 2015 or 2016, Gulf Coast refining and marketing companies would benefit from wider light/heavy crude price differentials.”

But President Obama’s re-election could mean elimination of tax exemptions, slower permitting process and tighter regulations on oil and gas companies, the ratings agency warned.

This was immediately evident when days after the President’s return to the White House, the U.S. Interior Department cut by more than half the acres of federal land the government will make available in Colorado, Utah and Wyoming for oil shale and oil sands development.

The decision on land availability reverses plans issued in the last days of President George W. Bush’s administration that would have opened more than two million acres for exploration and production of oil shale and oil sands.

While U.S. oil production has soared to a 16-year high, Mr. Obama’s critics say much of the development has been on state and private lands, while production on federal lands has fallen.

Republicans say it’s the latest example of the White House curtailing fossil-fuel production on public lands.

“This proposal will place further limitations on the exploration and development of our country’s natural resources and is yet another example of how this administration continues to stand in the way of North American energy,” Representative Ed Whitfield of Kentucky said in a statement.

Finally, federal corporate income tax exemptions enjoyed by the oil and gas sector could also end if the White House and Congress eliminate it as part of a grand bargain on tax reforms.

“Tax incentives for oil companies that encourage investment may return to the focus as well. The administration believes the energy industry needs no assistance at a time of tight federal budgets and disputes over government spending,” Moody’s Mr. Miller wrote. “The Obama administration may try to end tax incentives for E&P companies, removing depletion allowances and deductions for intangible drilling costs for E&P companies. ”

Although such measures would need congressional approval, it signals “possible friction” between the Obama administration and the oil and natural gas industry, the agency warned.